Keyera Corp revenue dropped on 30.4% in 2015 while EBITDA Margin increased on 8.3 pp from 14.0% to 22.4%
10.02.2016 • About Keyera Corp (
$KEY) • By InTwits
Keyera Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 22.4% in 2015 vs. 14.0% in 2014 vs. 9.9% in 2011
- EBITDA Margin is quite volatile: 22.4% in 2015, 14.0% in 2014, 11.1% in 2013, 11.1% in 2012, 9.9% in 2011
- Keyera Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.5%. At the same time it's a lot of higher than industry average of 4.9%.
- CAPEX is quite volatile: 706 in 2015, 787 in 2014, 340 in 2013, 166 in 2012, 171 in 2011
- The company has highly profitable business model: ROIC is at 12.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Keyera Corp ($KEY) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,569 | 2,942 | 3,277 | 3,624 | 2,521 | -30.4% |
| Gross Profit | 304 | 361 | 420 | 671 | 573 | -14.6% |
| SG&A | 22 | 24 | 27 | 44 | 51 | 16.2% |
| EBITDA | 255 | 327 | 365 | 509 | 564 | 10.9% |
| Net Income | 135 | 131 | 147 | 230 | 202 | -12.2% |
Balance Sheet
|
|---|
| Cash | 22 | 1 | 187 | 11 | 13 | 18.9% |
| Short Term Debt | 0 | 64 | 0 | 47 | 104 | 119.8% |
| Long Term Debt | 735 | 755 | 1,077 | 1,242 | 1,526 | 22.9% |
Cash flow
|
|---|
| Capex | 171 | 166 | 340 | 787 | 706 | -10.2% |
Ratios
|
|---|
| Revenue growth | 32.3% | 14.5% | 11.4% | 10.6% | -30.4% | |
| EBITDA growth | 5.8% | 28.1% | 11.7% | 39.3% | 10.9% | |
| Gross Margin | 11.8% | 12.3% | 12.8% | 18.5% | 22.7% | 4.2% |
| EBITDA Margin | 9.9% | 11.1% | 11.1% | 14.0% | 22.4% | 8.3% |
| Net Income Margin | 5.3% | 4.4% | 4.5% | 6.3% | 8.0% | 1.7% |
| SG&A, % of revenue | 0.9% | 0.8% | 0.8% | 1.2% | 2.0% | 0.8% |
| CAPEX, % of revenue | 6.6% | 5.6% | 10.4% | 21.7% | 28.0% | 6.3% |
| ROIC | 13.1% | 13.8% | 12.7% | 14.3% | 12.6% | -1.7% |
| ROE | 21.4% | 16.8% | 16.2% | 20.5% | 14.9% | -5.7% |
| Net Debt/EBITDA | 2.8x | 2.5x | 2.4x | 2.5x | 2.9x | 0.4x |
Revenue and profitability
Keyera Corp's Revenue dropped on 30.4% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 8.3 pp from 14.0% to 22.4% in 2015.
Gross Margin increased on 4.2 pp from 18.5% to 22.7% in 2015. SG&A as a % of Revenue increased slightly on 0.81 pp from 1.2% to 2.0% in 2015.
Net Income marign increased slightly on 1.7 pp from 6.3% to 8.0% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 28.0%. Keyera Corp showed fast CAPEX/Revenue growth of 22.4 pp from 5.6% in 2012 to 28.0% in 2015. For the last three years the average CAPEX/Revenue was 20.0%.Battling declining revenue the company made large investments to CAPEX (125% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at good ROIC (12.60%) and ROE (14.87%). ROIC decreased slightly on 1.7 pp from 14.3% to 12.6% in 2015. ROE decreased on 5.7 pp from 20.5% to 14.9% in 2015.
Leverage (Debt)
Debt level is 2.9x Net Debt / EBITDA and 2.9x Debt / EBITDA. Net Debt / EBITDA jumped on 0.4x from 2.5x to 2.9x in 2015. Debt jumped on 26.5% in 2015 while cash surged on 18.9% in 2015.
Management team
The company's CEO David G Smith is a founder and has spent 3 years at the company. Steven B Kroeker is a Keyera Corp's CFO. Steven B Kroeker has spent 6 years at the company.
Appendix 1: Peers in Utilities
Below you can find Keyera Corp benchmarking vs. other companies in Utilities industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Algonquin Power & Utilities Corp ($AQN) | 50.1% | 28.8% | 93.6% | 39.4% | |
| Northland Power Inc ($NPI) | 14.0% | 1.5% | 54.1% | 36.4% | |
| Fortis Inc/Canada ($FTS) | 2.2% | -2.2% | 10.8% | 33.5% | |
| Emera Inc ($EMA) | 28.5% | -0.3% | 8.3% | 31.8% | |
| Just Energy Group Inc ($JE) | | -10.1% | 13.4% | 17.4% | 10.2% |
| |
|---|
| Median (14 companies) | 14.0% | 0.1% | 10.9% | 13.3% | 10.2% |
|---|
| Keyera Corp ($KEY) | | 14.5% | 11.4% | 10.6% | -30.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Atco Ltd/Canada ($ACO.X) | 82.3% | 85.6% | 85.1% | 82.3% | |
| Canadian Utilities Ltd ($CU) | 76.5% | 81.0% | 80.8% | 77.7% | |
| Northland Power Inc ($NPI) | 47.7% | 52.5% | 63.7% | 61.8% | |
| Fortis Inc/Canada ($FTS) | 31.9% | 34.6% | 34.4% | 59.3% | |
| Capital Power Corp ($CPX) | 48.9% | 58.9% | 59.8% | 58.4% | |
| |
|---|
| Median (13 companies) | 42.7% | 34.6% | 37.1% | 55.0% | 15.4% |
|---|
| Keyera Corp ($KEY) | 11.8% | 12.3% | 12.8% | 18.5% | 22.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Boralex Inc ($BLX) | 51.8% | 52.8% | 58.4% | 55.9% | |
| Northland Power Inc ($NPI) | 48.1% | 54.2% | 52.4% | 51.2% | |
| US Geothermal Inc ($GTH) | -84.0% | -129.5% | 52.9% | 49.6% | |
| Canadian Utilities Ltd ($CU) | 42.9% | 45.9% | 45.7% | 47.4% | |
| Atco Ltd/Canada ($ACO.X) | 36.7% | 39.8% | 41.0% | 41.4% | |
| |
|---|
| Median (14 companies) | 31.5% | 29.7% | 34.0% | 34.0% | 3.9% |
|---|
| Keyera Corp ($KEY) | 9.9% | 11.1% | 11.1% | 14.0% | 22.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Northland Power Inc ($NPI) | 101.7% | 84.0% | 60.2% | 238.7% | |
| Boralex Inc ($BLX) | 17.7% | 5.6% | 62.5% | 85.9% | |
| Canadian Utilities Ltd ($CU) | 43.7% | 70.7% | 66.4% | 58.5% | |
| Atco Ltd/Canada ($ACO.X) | 36.2% | 58.8% | 54.2% | 48.3% | |
| Algonquin Power & Utilities Corp ($AQN) | 22.4% | 21.7% | 23.5% | 45.9% | |
| |
|---|
| Median (14 companies) | 25.4% | 31.6% | 26.8% | 19.6% | 0.1% |
|---|
| Keyera Corp ($KEY) | 6.6% | 5.6% | 10.4% | 21.7% | 28.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Just Energy Group Inc ($JE) | 146.5% | 18.6% | 6.0% | 10.6% | 17.9% |
| Atco Ltd/Canada ($ACO.X) | 11.6% | 10.8% | 10.5% | 9.6% | |
| Canadian Utilities Ltd ($CU) | 10.9% | 10.0% | 9.4% | 9.2% | |
| Emera Inc ($EMA) | 6.1% | 5.8% | 5.9% | 8.4% | |
| Northland Power Inc ($NPI) | 6.5% | 6.0% | 7.4% | 7.2% | |
| |
|---|
| Median (14 companies) | 6.6% | 5.3% | 6.0% | 5.4% | 17.9% |
|---|
| Keyera Corp ($KEY) | 13.1% | 13.8% | 12.7% | 14.3% | 12.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Atlantic Power Corp ($ATP) | 44.8x | 12.6x | 13.0x | 22.4x | |
| Boralex Inc ($BLX) | 5.9x | 6.6x | 7.6x | 12.1x | |
| Northland Power Inc ($NPI) | 5.9x | 6.4x | 5.8x | 6.9x | |
| Fortis Inc/Canada ($FTS) | 5.3x | 5.0x | 5.6x | 6.7x | |
| Just Energy Group Inc ($JE) | 2.5x | 4.3x | 7.4x | 6.4x | 3.9x |
| |
|---|
| Median (14 companies) | 4.5x | 5.0x | 5.6x | 4.8x | 3.9x |
|---|
| Keyera Corp ($KEY) | 2.8x | 2.5x | 2.4x | 2.5x | 2.9x |
